LAW PILL SERIES

PERMITTED DEDUCTIONS

Per the law, a worker has the right to receive an equal pay for an equal work done. However, the law allows for certain deductions to be made from the remuneration of the worker. The employer may with the consent of the worker deduct any amount due from the worker in respect of any pension scheme, provident fund, or any other fund or scheme agreed to by the worker.

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1. Pension Scheme

• An employer of an establishment shall make pension contributions on behalf of the worker at the end of every month, in accordance with the National Pensions Act, 2008 (Act 766).

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• The worker shall contribute 5.5% of his/her basic monthly salary whiles the employer contributes 13% of the basic monthly salary as total contribution to the Pension Fund.??

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• Out of the total contribution of 18.5%, an employer shall within fourteen days from the end of each month transfer the following remittances to the mandatory schemes on behalf of each worker:

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a. 13.5% to the first-tier mandatory basic national social security scheme (Tier 1). Therefore, every worker is required to register with the Social Security and National Insurance Trust (SSNIT) immediately after the worker receives his/her contract of employment.

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b. 5% to the second-tier mandatory occupational pension scheme, to be managed by a licensed pension trustee appointed by the employer (Tier 2). These trustees include the following:

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o??Petra Trust Company Limited

o??Metropolitan Pensions Trust Ghana Limited

o??Enterprise Trustees Limited

o??Negotiated Benefits Trust Company Limited

o??Providence Life Trust Company Limited

o???Axis Pension Trust Limited

o???Stallion Trust and Administration Limited and

o??Secure Pensions Trust Limited

2. Provident Fund

In addition to the Tier 1 and Tier 2 contributions, a worker shall voluntarily make contributions to a scheme under the third tier of the Scheme (Tier 3). The contributions shall be managed by approved trustees.

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• Offence

An employer who fails to remit total contributions to the mandatory schemes within the stipulated time commits an offence and is liable on summary conviction to a fine of two thousand penalty units or to a term of imprisonment for two years or to both.

3. Other Permitted Deductions

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·????????Any financial facility advanced by the employer to the worker at the written request of the worker or any facility guaranteed by the employer to the worker;

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·????????Any amount paid to the worker in error, as remuneration, in excess of what the worker is legitimately entitled to, from the employer;

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·????????On the written authority of the worker, any amount due from the worker as a membership fee or contribution to an organisation of which the worker is a member;

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·????????For meeting any loss suffered by the employer as a result of the loss of, or damage to, any property or thing used in connection with, or produced by, the employer’s business and which is under the control of the worker.